Data Models as Organizational Design: Coordinating beyond Boundaries Using Artificial Intelligence

Abstract

Organizational design scholars observe that advances in information technology are helping blur the boundaries between a firm’s internal and external activities. Yet despite the central role of information processing in managing the coordination of activities within the firm, we know little about the firm’s ability to process information beyond its boundaries. We provide a framework for understanding the coordination of activities beyond the firm’s boundaries in terms of micro-structural solutions to information provision. Our core insight is that organizational design can be modeled at the level of data. The firm’s ‘data model’ shapes processes of data integration using artificial intelligence, enabling agents to frame and find their problem contexts and self-organize activities. We contribute to the organizational design and strategy literatures by showing how coordination beyond boundaries has major, yet neglected, micro-structural effects on how firms organize. We discuss research implications for managerial capabilities, corporate strategy amid digitalization, and models of strategic representations.